Correlation Between Snap On and Amexdrug
Can any of the company-specific risk be diversified away by investing in both Snap On and Amexdrug at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Snap On and Amexdrug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and Amexdrug, you can compare the effects of market volatilities on Snap On and Amexdrug and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Snap On with a short position of Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and Amexdrug.
Diversification Opportunities for Snap On and Amexdrug
Pay attention - limited upside
The 3 months correlation between Snap and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug and Snap On is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Snap On are associated (or correlated) with Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Snap On i.e., Snap On and Amexdrug go up and down completely randomly.
Pair Corralation between Snap On and Amexdrug
Considering the 90-day investment horizon Snap On is expected to generate 3.05 times less return on investment than Amexdrug. But when comparing it to its historical volatility, Snap On is 3.48 times less risky than Amexdrug. It trades about 0.07 of its potential returns per unit of risk. Amexdrug is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.11 in Amexdrug on September 12, 2024 and sell it today you would earn a total of 0.09 from holding Amexdrug or generate 81.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Snap On vs. Amexdrug
Performance |
| Timeline |
| Snap On |
| Amexdrug |
Snap On and Amexdrug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap On and Amexdrug
The main advantage of trading using opposite Snap On and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On position performs unexpectedly, Amexdrug can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amexdrug will offset losses from the drop in Amexdrug's long position.| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
| Amexdrug vs. Sphere Entertainment Co | Amexdrug vs. Axalta Coating Systems | Amexdrug vs. Origin Materials | Amexdrug vs. Flexible Solutions International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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